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Business Formulas

mmBASS, Bass Diffusion Model

Category: Forecast

The Bass diffusion model is a growth model for the timing of initial purchase of new products. The underlining assumption is that the timing of initial purchase of a consumer relates to the number of previous buyers. Using coefficients of innovative and imitative behavior, the model yields good predictions of consumer durable goods but not only.

Business analysis formulas for Excel. Marketing tool for professionals

Where:

St = Sales at time t
In = Coefficient of Innovation (or coefficient of external influence)
Im = Coefficient of Imitation (or coefficient of internal influence)
C = Cumulative, the number of customers who have already adopted the new product
S = Saturation, the total number of potential adopters in the target group

Syntax

mmBASS(Saturation, Innovation, Imitation, Period, Optional Is_Integer As Boolean)

Saturation The total number of potential adopters in the target group
Innovation Coefficient of Innovation
Imitation Coefficient of Imitation
Period The time period to make a forecast for
Is_Integer Optional - TRUE returns integer values in output, FALSE returns decimal values

Example

See example file Business Formulas.xls, sheet mmBASS.

Business analysis formulas for Excel. Marketing tool for professionals

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Related MM4XL software tools
  • Forecast Manager
Source
Frank M. Bass, A New Product Growth For Model Consumer Durables, Management Science Vol. 15, No. 5, January 1969
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